Research On Fraud Of L/C And Countermeasures

Letter of credit(L/C)is a main legal instrument of international settlement which is widely used in international trade.It plays a more and more important role in economic aetivities.However,being a nonviolence crime,the fraudulent conduct of L/C has severely spoiled the development of international trade.The L/C frard is very harmful.It not only makes economic losses of the international trader,but also damages the order of finaneial management and international trade.So it's very necessary to analyze the L/C fraud.This article researches on the fraudulent conduct of L/C,and reveals the reasons and forms of it,aiming to find out the effective measures against the fraudulent conduct of L/C.What is most important in regard to the research con cerning the and it's counter strategy,are width and depth.On the basis of widely absorbing the fruit from Predecessors,we spare no effort to put forward our own opinion concerning the L/C fraud and counter strategy,and hoping it can serve as certain message contributing to the perfection of L/C system.We also sincerely hope that it could be of some help to import and export enterprises and banks using L/C for payment and account settlenlent.This article mainly analyzes from the following aspects:Partâ… :Introduction to illustrate the topics of this background,significance,research methods and content.Partâ…¡:The kinds of L/C fraud.There are many kinds of L/C fraud.Subjeet to the form of the fraud,there is forging of documents,"soft clause"L/C,etc.Subject to the actor of fraud, there are fraud made by the applicant and the beneficiary,etc.Partâ…¢:The causes and damages of L/C fuaud.For the objective side,there are two causes too.One is about the L/C legal system it'self,the other is about other afctors.In the former field, the"independent abstract" rule and the"strict compliance"rule of L/C have flaws for violators.As for the other afctors,we can find that the preventive abilities of the traders and the banks are not enough,which makes the fraudulent intention can easily become a fact.So the "great profit" and the weak punishment become the objective reasons of L/C fraud.Partâ…£:The counter measures to guard against L/C fraud.This Part first discusses the Pre-eounter-measures in terms of importer,exporter,banks and the preventative measures that every litigant could take to forestall L/C cheat,and then it expounds on the control counter measures after the event.And then from the perspective of legislature,judicature and execution,this part deals with this matter from the level of domestic law counter strategy.Later it stresses that L/C fraud can be effectively checked through signing international treaty,enhancing international cooperation and founding international organization.